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American Morning
Grassley Seeks to Increase Child Tax Credit
Aired June 03, 2003 - 07:36 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: We're going to check in on Capitol Hill now. More tax cut developments on Capitol Hill. Senator Charles Grassley of Iowa plans to introduce a bill that would expand the child tax credit. This follows complaints that several million low income households gained little or nothing from a tax cut that just became law.
Our congressional correspondent Jonathan Karl is live from Capitol Hill -- Jonathan, good morning.
JONATHAN KARL, CNN CORRESPONDENT: Good morning, Daryn.
You know, under the tax bill that originally passed in the Senate, virtually all low income families would have benefited from that increase in the child tax credit, but in last minute negotiations with the House, that was eliminated, the so-called refundable child tax credit, prompting outrage and outcry from Democrats, who said this was yet more proof that the tax bill was simply something to benefit the rich.
So enter Chuck Grassley. The Republican chairman of the Senate Finance Committee said to those Democrats fine, let's have another tax cut. Here's what Grassley's bill would do. It would extend the tax credit to families with incomes from $10,500 to $26,600. Those are the families, by and large, that were left out by that last minute change. Grassley's bill would also make that increase in the child tax credit permanent, permanent for all eligible families, including upper middle income families.
And finally, if you look at all of this, Grassley's bill, with some other changes, would cost more than $60 billion. So effectively increasing the size of the tax cut that was passed just a couple of weeks ago at $350 billion to well over $400 billion.
Now, I spoke with Senator Grassley about these changes last night. Here's what he had to say.
(BEGIN VIDEO CLIP)
SEN. CHARLES GRASSLEY (R-IA), JUDICIARY COMMITTEE: A family of two will get an $800 check this summer. That's going to mean a lot to families that are low income.
KARL: But some families won't be getting that check.
GRASSLEY: That's the purpose of tying the two together and to make it permanent law, so in the future we don't have to worry about making this mistake again.
(END VIDEO CLIP)
KARL: Now, the reason why this is such a highly charged issue here on Capitol Hill is this is the part of the tax cut that families will see this summer. Most families with children will be getting checks in the mail of $400 per child -- Daryn.
KAGAN: Jonathan, as an expert on Capitol Hill, you have to explain to me why it works this way. This was such an important thing, why do the senators and congressmen have to figure it out after the bill has passed, how it's going to work? Why wasn't all this math done before?
KARL: The big problem here for Republicans is they were working under a limit. The most they could pass in the tax cut was $350 billion. So they cut where they could, they ended up cutting here. Now, many conservatives said this was a logical place to cut because you're taking away something that was going to families that didn't pay any income taxes at all. This is all a question of giving the tax credit to those who didn't pay any taxes. So conservatives said well, if they didn't pay any taxes, why are we giving them a credit?
They dropped it in the last minute. Many people didn't even know about that change, though, until after they had finally voted on the bill. And that's why you have this big outcry and this effort to try to do something about it.
KAGAN: Well, the math might have worked, but I don't think the politics did and maybe that's why, as you're explaining, why they're trying to redo it right now.
Jonathan Karl on Capitol Hill.
KARL: Many up here would agree with you.
KAGAN: You got it. There you go.
Jonathan, thank you so much.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired June 3, 2003 - 07:36 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: We're going to check in on Capitol Hill now. More tax cut developments on Capitol Hill. Senator Charles Grassley of Iowa plans to introduce a bill that would expand the child tax credit. This follows complaints that several million low income households gained little or nothing from a tax cut that just became law.
Our congressional correspondent Jonathan Karl is live from Capitol Hill -- Jonathan, good morning.
JONATHAN KARL, CNN CORRESPONDENT: Good morning, Daryn.
You know, under the tax bill that originally passed in the Senate, virtually all low income families would have benefited from that increase in the child tax credit, but in last minute negotiations with the House, that was eliminated, the so-called refundable child tax credit, prompting outrage and outcry from Democrats, who said this was yet more proof that the tax bill was simply something to benefit the rich.
So enter Chuck Grassley. The Republican chairman of the Senate Finance Committee said to those Democrats fine, let's have another tax cut. Here's what Grassley's bill would do. It would extend the tax credit to families with incomes from $10,500 to $26,600. Those are the families, by and large, that were left out by that last minute change. Grassley's bill would also make that increase in the child tax credit permanent, permanent for all eligible families, including upper middle income families.
And finally, if you look at all of this, Grassley's bill, with some other changes, would cost more than $60 billion. So effectively increasing the size of the tax cut that was passed just a couple of weeks ago at $350 billion to well over $400 billion.
Now, I spoke with Senator Grassley about these changes last night. Here's what he had to say.
(BEGIN VIDEO CLIP)
SEN. CHARLES GRASSLEY (R-IA), JUDICIARY COMMITTEE: A family of two will get an $800 check this summer. That's going to mean a lot to families that are low income.
KARL: But some families won't be getting that check.
GRASSLEY: That's the purpose of tying the two together and to make it permanent law, so in the future we don't have to worry about making this mistake again.
(END VIDEO CLIP)
KARL: Now, the reason why this is such a highly charged issue here on Capitol Hill is this is the part of the tax cut that families will see this summer. Most families with children will be getting checks in the mail of $400 per child -- Daryn.
KAGAN: Jonathan, as an expert on Capitol Hill, you have to explain to me why it works this way. This was such an important thing, why do the senators and congressmen have to figure it out after the bill has passed, how it's going to work? Why wasn't all this math done before?
KARL: The big problem here for Republicans is they were working under a limit. The most they could pass in the tax cut was $350 billion. So they cut where they could, they ended up cutting here. Now, many conservatives said this was a logical place to cut because you're taking away something that was going to families that didn't pay any income taxes at all. This is all a question of giving the tax credit to those who didn't pay any taxes. So conservatives said well, if they didn't pay any taxes, why are we giving them a credit?
They dropped it in the last minute. Many people didn't even know about that change, though, until after they had finally voted on the bill. And that's why you have this big outcry and this effort to try to do something about it.
KAGAN: Well, the math might have worked, but I don't think the politics did and maybe that's why, as you're explaining, why they're trying to redo it right now.
Jonathan Karl on Capitol Hill.
KARL: Many up here would agree with you.
KAGAN: You got it. There you go.
Jonathan, thank you so much.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
